Homeowners, country clubs spar over mandatory memberships

August 19, 2011|By Paul Owers, Sun Sentinel

Some homeowners who stretched to buy into South Florida's country club lifestyle are feeling the pain as they pull back to live within their means.

Take Eli Schneider, a semi-retired software developer, who paid $310,000 in 2006 for a two-bedroom house at the Fountains Country Club west of Lake Worth. Because The Fountains requires country club membership, Schneider also sprang for a $9,000 tennis package.

Now he and his wife can't sell the home as they cope with the flagging economy. They say the mandatory club membership deters prospective buyers.

"Mandatory membership acts as a penalty to anybody who's a buyer," said Schneider, 74.

Required country club memberships seem to be the biggest problems for more moderately priced developments such as the Fountains and Aberdeen Country Club, said Gary M. Singer, a real estate lawyer in Sunrise. Some homeowners have stopped paying dues for golf and tennis because of financial difficulties.

"Neighborhoods where homeowners were reaching for that lifestyle are taking the hardest hit now," Singer said.

More expensive enclaves such as Boca Woods Country Club don't seem to be affected as much, even though their fees are many times higher. At Boca Woods, for example, it can cost $50,000 to buy in, though $20,000 of that is refundable when the homeowner sells. Monthly dues cost about $1,000.

"We feel our success is directly attributable to mandatory memberships," said Sandy McGaughey, general manager of the 645-home Boca Woods Country Club. "People are jumping all over this lifestyle."

At the 645-home Boca Woods off State Road 7, the delinquency rate for membership dues is about 2 percent, down from a year ago, McGaughey said.

Member fees have allowed Boca Woods to renovate two golf courses and a practice facility, refurbish an outside restaurant and pool area and maintain 24-hour security, President Bob Roman said.

"You've got to keep improving the facilities to entice people to buy homes here," Roman said. "People want to see a facility that's always being improved and updated."

He cited recent financial problems at The President, a West Palm Beach club whose members voted down mandatory membership a decade or so ago.

"If that club had mandatory membership, it'd still be healthy," McGaughey said. "Clubs that don't have mandatory membership are just trying to figure out how to pay the bills."

But real estate agents and homeowners at various clubs say the forced memberships don't appeal to many buyers today and reduce home values in an already difficult housing climate.

At the upscale Boca West Country Club, a three-bedroom townhome recently was offered at $129,000, well below market value, because it comes with a $70,000 mandatory membership.

Homes in mandatory membership communities tend to languish on the market, real estate agents say. Some homes in Boca West and Woodfield Country Club, for example, have been for sale for more than 1,000 days, according to the multiple listing service.

"In order to live a country club lifestyle, you need to have discretionary income, which a lot of people don't have anymore," said Terry Story, an agent for Coldwell Banker.

Palm Beach County has roughly 70 developments where homeowners are required to buy country club memberships. Broward County has fewer than 10 private clubs, and membership isn't much of an issue because it's voluntary or the fees are lower, said Caroline Frank, membership director at Fort Lauderdale Country Club.

Broward clubs tend to have more year-round residents who can't afford steep memberships – so developments weren't built with mandatory memberships in mind, observers say.

At Parkland Golf & Country Club, for instance, homeowners must buy a social membership for about $3,000 a year and it includes access to tennis, a fitness center, spa, pools and the dining room. An optional golf membership costs about $6,500 annually.

Many clubs can't foreclose on delinquent homeowners because development bylaws don't allow it, so the clubs have to wait for the homes to sell to see if they can collect past-due fees, Singer said.

Some circuit courts have upheld individual homeowner challenges to mandatory memberships, but none of the decisions have been made at a level that would have broader reach, Margate lawyer Donna D. Berger said.

Les Mittleman dropped his membership at Aberdeen before it went mandatory about eight years ago. He continues to live there.

Mittleman said one of his former Aberdeen neighbors abandoned his house because he was unable to keep up with the club dues. It remained vacant for more than a year before a buyer took it off the lender's hands, he said.

Mandatory country club memberships are no longer practical, Mittleman said.

"The dues are outrageous," he said. "In this economy, people just don't want to pay 20 grand."